Cohousing-L Mailing List: Re: Non-profit entities

[Tiffany Lee Brown (magdalen23]

I run a small nonprofit, and I do not have the cohousing experience. However I 
thought a little feedback from me might be helpful anyway.

One of the best ways to approach the question, "Should we start a nonprofit?" 
is to try it out first by finding a fiscal sponsor. fiscal sponsorship involves 
an existing 501(c)(3) agreeing to act as your fiscal sponsor, generally taking 
about 10% off the top of any revenue you generate through them. Your goals 
should roughly align with their mission statement, but you are not considered 
part of their programming.

The fiscal sponsor can issue donation receipts to your donors, to be written 
off on their taxes in many cases, and takes care of the higher level 
bookkeeping and administrative tasks and costs associated with running a 
501(c)(3). In some ways these expenses and activities don't seem like a whole 
lot, but when you are doing them, they can end up running your life. It can be 
nice to have someone else doing it for you. You would want to ask the fiscal 
sponsor whether they could except funds on your behalf from certain foundations 
and individuals you plan to target, in case they feel there is a conflict 
between their own interests and yours.

After a year of working with the fiscal sponsor, you should have a much clearer 
idea of whether your group should go ahead and go through the slog of becoming 
a 501(c)(3) nonprofit. 

Also keep in mind that the board of directors must not profit in anyway from 
the activities of the organization. I am not a lawyer, but I would guess that 
your group would want to have goals such as helping the community at large, not 
making your cohousing space better in order to increase your own property 
values. I would be interested to hear what more experienced cohousers say about 
using a 501(c)(3) structure.

T in Oregon


Sent from the far shores of a distant land

> On Oct 13, 2016, at 8:44 AM, Joel Plotkin <joel [at] sunyit.edu> wrote:
> 
> 
> Hey Cohos,
> 
> Hundredfold Farm Cohousing in Orrtanna PA is considering formation of a
> 501(c)3 non-profit arm for the purpose of sponsoring events and receiving
> grants from foundations. Have any other communities done this? Problems?
> Successes? How did you use the non-profit? What were some of your mission
> goals?
> 
> Respond on or off line...
> 
> Joel Plotkin
> Hundredfold Farm Cohousing
> Orrtanna PA
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